Thailand halts 49 data centers in AI backlash

The AI boom had persuaded many Asian governments to aggressively court data centers by offering tax breaks, discounts on land, and easy access to power and water. Big tech companies including Microsoft and Amazon pledged billions of dollars for new data centers and AI infrastructure across Asia. Thailand's suspension of 49 projects on Sept. 4 marks a shift in that posture, as regulators draft new rules on resource use and safety.

Even before the suspension, operators were flagging physical constraints. Kevin Guan of Bridge Data Centres, a Bain Capital-backed firm, said at the Fortune Leaders Forum in Macau on Sept. 8 that there are physical limits to how quickly data centers can be built at scale, and that the industry is seeing significant delays. John Taylor of the architecture firm Gensler argued that data centers need to move from being perceived as industrial infrastructure to being part of civic infrastructure that serves a community. In land-constrained Asian cities, Taylor said, data centers are already being built up to 10 or 11 stories and sited close to residential areas, and clients are experimenting with diverting excess heat to warm swimming pools in winter. In Johor, Malaysia, Bridge built a wastewater treatment plant on its campus to recycle municipal wastewater.

Whether the Thai suspension becomes a template for other Asian governments is likely to hinge on how the new rules on resource use and safety are written. For operators and their corporate clients, the harder test may be structural: buildings designed to last 20 years versus AI chips that may last under five, and a continued reliance on fossil fuels for roughly 56% of data center energy worldwide, per the International Energy Agency. That reliance is already straining corporate climate commitments, as Gensler's zero-carbon-by-2030 pledge illustrates.